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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--In a ballot measure this November, Arizonans will be asked if they want to double the percentage of electricity generated from renewable resources. But the state's electric utilities say that adoption of the measure, called Proposition 127, will result in the closure of the Palo Verde Generating Station (PVGS), the nation's largest operating nuclear plant. PVGS, located about 50 miles west of Phoenix, is a three-unit, 3,979-megawatt (MW) plant.
Proposition 127 would amend Arizona's constitution and require the state's electric utilities, including Arizona Public Service Company (APS) (Phoenix, Arizona), the operator and largest single owner at Palo Verde, to get 50% of their electricity from renewables like wind and solar by 2030. That's an increase from the existing requirement of 15% by 2025. APS is a subsidiary of Pinnacle West Capital Corporation (NYSE:PNW) (Phoenix, Arizona). The other Arizona electric utilities affected by Proposition 127 would be Salt River Project (SRP) (Tempe, Arizona) and Tucson Electric Power Company (TEP), a unit of UniSource Energy Corporation (NYSE:UNS) (Tucson, Arizona).
APS owns 29.1% of Palo Verde. SRP owns 17.49%. Out-of-state owners include El Paso Electric Company (NYSE:EPE) (El Paso, Texas) and Southern California Edison (SCE), a subsidiary of Edison International (NYSE:EIX) (Rosemead, California), which each own 15.8% of the plant; Public Service Company of New Mexico (PNM), a unit of PNM Resources Incorporated (NYSE:PNM) (Albuquerque, New Mexico), which owns 10.2% of Palo Verde; the Southern California Public Power Agency, a 5.91% owner; and the Los Angeles Department of Water & Power (Los Angeles, California), which holds a 5.7% interest.
Though not an owner at PVGS, TEP opposes the measure because it said it will force the construction of thousands of megawatts of renewable generation that could drive down wholesale power prices, rendering other power generators in the state uneconomic. Company representatives emphasize they support renewables.
Proposition 127 would not require Palo Verde to close. But utility interests are saying adoption of the measure would result in the plant becoming uneconomic. APS, SRP and TEP, along with several Arizona business groups, oppose the measure. Billionaire investor Tom Steyer is supporting the measure.
Supporters, pointing to other states that have raised their renewable energy mandates in recent years, say sun-drenched Arizona is at risk of falling behind. California just adopted a plan to have 100% of its electricity come from renewable resources by 2045. For more information, see September 12, 2018, article - California Second State to Mandate All-Renewable Electricity.
Industrial Info is tracking 16 active renewable energy projects under development in Arizona worth a combined $6.71 billion. These projects have total generating capacity of about 4,351 MW. Several of these projects are two years or more behind their scheduled construction kickoff date.
Leading the charge against Proposition 127 is the utility-funded group Arizonans for Affordable Electricity. "We refer to this as an energy tax, because it is going to tack on a significant tax every time you get that energy bill at the end of the month," said spokesperson Matthew Benson.
"Arizonans understand there's no free lunch," Benson told the PBS station. "If you're going to require utilities phase out all their base coal-fired plants, close Palo Verde, which is the largest source of clean energy in the country, and then replace it with thousands and thousands of solar farms, new transmission lines, battery power ... it costs billions and billions of dollars. Those costs have to get passed along to consumers."
Ads released by the "No on 127" group emphasize the measure will impose a hefty financial burden on the state's electric customers, at least $500 per year if not more.
Kris Mayes, a former utility regulator at the Arizona Corporation Commission (ACC) (Phoenix), disputed Proposition 127 will drive electric bills upward. "We know that renewable energy sources like solar and wind are coming in at record lower prices, 2.2 cents a kilowatt-hour. We see that it's actually reducing utility bills in states like Colorado and Nevada," she told Arizona PBS. For more on renewable power development in Colorado, see July 3, 2018, article - Xcel Energy Eyes $2.5 Billion in Colorado Power Projects.
Mayes denied Proposition 127 will render Palo Verde uneconomic. She said APS can't make the unilateral decision to close the plant. Rather, any closure decision must be put to a vote of all the owners. "That nuclear power plant is going to stay there, it's going to live out its useful life," she said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Proposition 127 would amend Arizona's constitution and require the state's electric utilities, including Arizona Public Service Company (APS) (Phoenix, Arizona), the operator and largest single owner at Palo Verde, to get 50% of their electricity from renewables like wind and solar by 2030. That's an increase from the existing requirement of 15% by 2025. APS is a subsidiary of Pinnacle West Capital Corporation (NYSE:PNW) (Phoenix, Arizona). The other Arizona electric utilities affected by Proposition 127 would be Salt River Project (SRP) (Tempe, Arizona) and Tucson Electric Power Company (TEP), a unit of UniSource Energy Corporation (NYSE:UNS) (Tucson, Arizona).
APS owns 29.1% of Palo Verde. SRP owns 17.49%. Out-of-state owners include El Paso Electric Company (NYSE:EPE) (El Paso, Texas) and Southern California Edison (SCE), a subsidiary of Edison International (NYSE:EIX) (Rosemead, California), which each own 15.8% of the plant; Public Service Company of New Mexico (PNM), a unit of PNM Resources Incorporated (NYSE:PNM) (Albuquerque, New Mexico), which owns 10.2% of Palo Verde; the Southern California Public Power Agency, a 5.91% owner; and the Los Angeles Department of Water & Power (Los Angeles, California), which holds a 5.7% interest.
Though not an owner at PVGS, TEP opposes the measure because it said it will force the construction of thousands of megawatts of renewable generation that could drive down wholesale power prices, rendering other power generators in the state uneconomic. Company representatives emphasize they support renewables.
Proposition 127 would not require Palo Verde to close. But utility interests are saying adoption of the measure would result in the plant becoming uneconomic. APS, SRP and TEP, along with several Arizona business groups, oppose the measure. Billionaire investor Tom Steyer is supporting the measure.
Supporters, pointing to other states that have raised their renewable energy mandates in recent years, say sun-drenched Arizona is at risk of falling behind. California just adopted a plan to have 100% of its electricity come from renewable resources by 2045. For more information, see September 12, 2018, article - California Second State to Mandate All-Renewable Electricity.
Industrial Info is tracking 16 active renewable energy projects under development in Arizona worth a combined $6.71 billion. These projects have total generating capacity of about 4,351 MW. Several of these projects are two years or more behind their scheduled construction kickoff date.
Leading the charge against Proposition 127 is the utility-funded group Arizonans for Affordable Electricity. "We refer to this as an energy tax, because it is going to tack on a significant tax every time you get that energy bill at the end of the month," said spokesperson Matthew Benson.
"Arizonans understand there's no free lunch," Benson told the PBS station. "If you're going to require utilities phase out all their base coal-fired plants, close Palo Verde, which is the largest source of clean energy in the country, and then replace it with thousands and thousands of solar farms, new transmission lines, battery power ... it costs billions and billions of dollars. Those costs have to get passed along to consumers."
Ads released by the "No on 127" group emphasize the measure will impose a hefty financial burden on the state's electric customers, at least $500 per year if not more.
Kris Mayes, a former utility regulator at the Arizona Corporation Commission (ACC) (Phoenix), disputed Proposition 127 will drive electric bills upward. "We know that renewable energy sources like solar and wind are coming in at record lower prices, 2.2 cents a kilowatt-hour. We see that it's actually reducing utility bills in states like Colorado and Nevada," she told Arizona PBS. For more on renewable power development in Colorado, see July 3, 2018, article - Xcel Energy Eyes $2.5 Billion in Colorado Power Projects.
Mayes denied Proposition 127 will render Palo Verde uneconomic. She said APS can't make the unilateral decision to close the plant. Rather, any closure decision must be put to a vote of all the owners. "That nuclear power plant is going to stay there, it's going to live out its useful life," she said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
